China State Construction Development Holdings Issues Significant Profit Warning for FY2025

Key Highlights

• Sharp Decline in Profit: The Board of Directors of China State Construction Development Holdings Limited (“CSCD Holdings” or “the Company”) has announced an expected profit attributable to owners of approximately HK\$237 million for the year ended 31 December 2025 (FY2025), a substantial decrease from HK\$650 million in FY2024.
• Major Contributing Factors: The decrease is primarily attributed to a combination of reduced new project volumes, intensified competition affecting project margins, and rising project costs.

Detailed Analysis

Profit Drop and Its Causes

CSCD Holdings anticipates a decline of nearly 64% in annual profit for FY2025 compared to the previous year. This sizeable drop is driven by several key factors:

1. Reduced Volume of New Projects: The prevailing property market conditions and the current economic cycle have resulted in fewer new projects. Furthermore, the completion of large-scale projects in Hong Kong and Macau over the past two years means that recognized revenue for FY2025 is significantly lower.
2. Intense Competition and Lower Margins: The Company faces fierce competition in tender pricing for new projects. In addition, several projects have failed to achieve the expected profit margins upon final account settlements, further eroding profitability.
3. Increased Project Costs: Various projects have experienced higher costs due to delays during the initial preparation stage, prolonged construction periods, and additional modifications. These factors have contributed to a rise in project expenses, impacting the bottom line.

Shareholder Implications and Price Sensitivity

This announcement is highly price-sensitive and may materially affect the share value of CSCD Holdings. The projected profit for FY2025 represents a significant decline, implying challenges in both revenue generation and cost management. Shareholders and potential investors should be aware that:

• The Company’s business is currently affected by macroeconomic challenges and sector-specific headwinds.
• Profitability concerns may lead to volatility in the share price as the market digests this information.
• The Company is still finalizing its annual results, and these figures are based on preliminary unaudited accounts. The final audited results may differ from the numbers disclosed in this announcement.

Management and Board Update

The announcement was issued under the authority of Mr. Wang Xiaoguang, Chairman and Non-executive Director. The Board comprises both executive and non-executive directors, including independent directors—underscoring a robust governance structure.

Timing of Final Results

The audited annual results for FY2025 are expected to be released before the end of March 2026. Until then, the information provided should be treated as preliminary and subject to change.

Investor Advice

Shareholders and investors are strongly advised to exercise caution when dealing in the shares of CSCD Holdings. The unexpected profit warning and the underlying reasons signal potential risks and uncertainties in the Company’s near-term outlook.

Disclaimer

This article is based on publicly available information from China State Construction Development Holdings Limited. The figures cited are preliminary and unaudited, and may be subject to change upon the release of final audited results. Investors should undertake their own due diligence and consult professional advisors before making investment decisions. The author and publisher accept no responsibility for any financial losses arising from the use of this information.

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